Mining ZimbabweLatest Mining News, Policy and Industry Updates

On Monday, Zimbabwe unveiled a strategic roadmap to propel the country’s mining sector to US$12 billion industry by 2023. Already, the mining sector is the largest foreign currency earner, accounting for 70 percent of export receipts.

The mining sector remains one of the key industries expected to anchor the revival of an economy suffering from depressed productivity and foreign currency shortages among others.

Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion while chrome, iron, steel diamonds and coal will contribute US$1 billion.

Lithium is expected to contribute US$500 million while other minerals will contribute US$1,5 billion.

Already, a number of new mining projects are at various stages of implementation while expansion of existing operations is underway.

Given the abundant mineral resource in the country,untapped or under tapped, mining holds huge potential of transforming the country to an upper middle class, in line with country’s Vision 2030. In launching the roadmap, President Mnangagwa warned of humps along the journey towards attaining the US$12 billion target, but said collective effort, determination and commitment, will see the “Zimbabwe we all want” being built.

 Acting on power and transport

The Ministry of Energy and Power Development suggests that as much as 2 000MW are needed in next three years to ensure adequate power supplies to the nation. The total investment needed would be around $3 billion. While there are various projects in the pipeline, including some being promoted by mining houses, there is need for additional substantial investment into the energy since the $12 billion target would also largely depend on the availability of electricity. Rail and road networks need capital funding as well as cargo loading and offloading capacities. The investments will also require adequate working capital. This calls for a solid business proposition.

 Exploration policy

Currently, there is no effective mineral exploration policy, which should be attached to Mineral Development Policy. The Government says the exploration policy will come out soon.

The mineral exploration policy would allow funds to flow into exploration with adequate incentives to create an immediate junior miners sector. The targeted production volumes will make the targets more realistic if based on bankable mineral resource figures generated by mineral resource accounting firms. This is perhaps the most critical variable of all.

 Redesigning of small-scale sector

Small-scale miners are a major contributor to production volumes and this largely refers to gold and chrome. As with small-scale gold miners, these have been the major contributors to  production but they are involved in exploitation of shallow oxide deposits. Experts believe output would soon decline on increasing depths, low recoveries, hand got systems and depleting deposits. As such, there is need to redesign the small-scale mining strategy. There is need to define sector, regulate it and provide adequate support.

CBM or Methane

Zimbabwe is currently still in the initial production testing of coal bed methane. There is a lot of work that needs to be done both technically and commercially. Besides, the country still needs to craft a Gas Policy to regulate the new sector. Realising the set targets might be too ambitious though work can be speeded up, Shanghai Energy Exploration, the company that intends to extract methane gas and build a power plant said recently that from the preliminary works, there is evidence of the existence of a considerable methane whose now need to be proved.

 Coal

There is a suggestion that coal production volumes will increase, but no explanation as  to where the growth market is outside ZESA’s Stage 3 project. Prices of coal on the international market are strongly regulated and same goes for user markets. Industry players say thermal coal is around US$40 per tonne.

Zimbabwe produces at around US$20 per tonne. Transport to port costs US$60 per tonne making it US$80. If port and sea freight charges are factored, clearly, this becomes a challenge. Technically not enough studies have been done to see which steel plants abroad can use local, thus mentioning of exports of coking coal might be misplaced. South Africa Mittal can use a bit but blending constraints will limit volumes.

 Chrome

Chrome sector is a cyclic and generally very risky industry affected by global market trends around steel industry. Steel production tends to move up and down in volume and price and chrome is dependent on steel so its market tends to be unstable and price sensitive.

Besides, the sector is heavily dependent on competitive electricity tariffs.

The current tariff and United States/China trade war are threatening the sector. About 40 percent of chromium smelting cost is electricity so an unduly high electricity tariff kills this sector. However, while the sector faces a myriad of threats, if it can get a power tariff of around US4c per unit, considerable growth can be achieved but not at nearly US7c as current.

 New projects

New projects such as Karo will need lead time to place orders, get capital equipment delivered and then construct. This takes an average of three years. The same goes for diamonds where it may take long to move up the growth value curve seeing that not much has been done on exploration.

Karo is, however, optimistic that by 2023, it will be producing at least 1,4 million ounces of platinum group metals and would have finished setting up a 300MW solar plant and a base metals refinery that will allow it to export directly from Zimbabwe.

 Skills gap

A salient point is skills and competences as well as a vibrant industry to support this whole effort. This is critical. According to studies, Zimbabwe does not possess sufficient knowledge to propel the economy to the required levels.

It has been noted that the pervasive skills and knowledge gaps foster an operative level inadequate to take the industry to expected higher levels of job creation, valued added goods, and stimulation of economy through linkages, driving growth and exports and higher tax revenue among others.

The research also noted the existence of capacity challenges, which it said are apparent throughout the industry, but with training institutions most severely affected.

It was also noted that the skills levels of critical support institutions and stakeholders of the mining industry are still below the levels expected to deliver what the Government is expecting_Business Weekly

HARARE – Gold production of 100 tons and  earnings of US$4 billion per annum will anchor the attainment of a US$12  billion local mining industry by 2023, a Cabinet Minister said on  Monday.

Mines and Mining Development Minister Winston Chitando said the US$12  billion milestone will be achieved through production growth across high  value minerals such as gold, platinum, diamonds, lithium and chrome.

He said US$3 billion was expected from platinum at a production rate of 2.4 million ounces per annum while chrome, iron ore and steel were  expected to contribute US$1 billion, the same as diamonds at a  production rate of over 11 million carats per year.

Coal and hydro-carbons, he said, would contribute US$1 billion, lithium US$0.5 billion while other minerals would add US$1.5 billion.

“We can do it, we have to do it, we will do it,” Chitando declared  boldly at the launch of a strategic road map to the achievement of a USD12 billion mining industry by 2023.

“The US$12 billion has been defined and the role now (of government) is  to facilitate its achievement.”

Chitando said the US$12 billion milestone was based on quick wins and  low hanging fruits, given that there were several projects across  various minerals which were being developed with some scheduled to come  on stream within the next two years.

He said to aid the achievement of the milestone, the government would  also come up with policies for specific minerals and provincial mining  policies while pushing for increased exploration and the participation  of small scale miners.

“The 2023 milestone only includes a fairly small percentage of the  minerals we have (in Zimbabwe). We talk of over 40 minerals but if we  look at what we are targeting its probably around 10 minerals which  shows the potential that we can and we should do better to improve that US$12 billion,” he said.

“If we look at the projections we have done a minimum of US$20 billion  will be the target by 2030.”

Chitando said the Zimbabwe is Open for Business mantra adopted by the  second republic had enabled new investment in the mining sector to  trickle in.

“What Zimbabwe lacked to take advantage of the mineral endowment we  have, was the capital investment and when His Excellency (President

Mnangagwa) came up with his mantra Zimbabwe is Open for Business what  that did was to unlock new sources of capital.

“It enabled us to talk about the US$12 billion, an increase in the  mining industry from US$2.7 billion to US$12 billion, that is a 345  percent increase,” he said. – New Ziana

Zimbabwe expects to start  producing sufficient electricity for domestic use and surplus for export  by 2024 through the exploitation of its huge and untapped Coal Bed  Methane (CBM) deposits as well as investment in new thermal power  stations, a Cabinet Minister has said.

Zimbabwe has one of the highest measured CBM resources in Southern  Africa and is believed to be sitting on an estimated 765 billion cubic  metres in the Hwange/Lupane basins.

In early 2012, Mozambique discovered CBM in areas that border  Zimbabwe’s Manicaland province into which it is believed the gas also  flows.

Coal bed methane offers a cleaner alternative source of power compared  to coal and the scope is even greater for its exploitation considering  that Zimbabwe is battling a severe power crisis through over-reliance on  hydro power which is affected by seasonal rainfall.

It can also be converted into diesel, petrol, ethanol, fertilizers,  aviation fuel and other products including specialist lubricants and  waxes.

Mines and Mining Development Minister Winston Chitando said the country  expected to generate electricity from CBM within the next two years  while five investors, including Afrochine, Jinan and Karo Resources were  also at various stages of setting up thermal power stations.

“Government is intensifying the drive for the extraction of coal bed  methane into the production of electricity as well as other household  and industrial uses. The development of CBM and oil deposits will be  sped up and the first CBM electricity power station should be  operational by 2021 at a capacity of 200 megawatts,” he said.

“At the moment there is work in progress on the establishment of over 2000 megawatts from new coal and CBM projects by 2023. The major  objective is that Zimbabwe should be exporting electricity by 2024, the  objective is that Zimbabwe should be fuel self-sufficient by 2030.”

Chitando said a CBM- Oil strategy would be unveiled mid next year to  give impetus to the growth of the energy sector.

In terms of oil production from CBM, he said two projects were in the  pipe-line.

“As for two of the projects, one has come up with a bankable  feasibility study which demonstrates the capacity to produce 600 million  litres of diesel. The other is a pre-bankable feasibility study of 400  million litres. So from CBM alone, Zimbabwe has the opportunity to  produce over a billion litres, let alone the other initiatives from  oil,” he said.

Analysts contend that CBM exploitation presents an opportunity for  Zimbabwe to lessen its dependence on imported petroleum and electricity  while also providing an alternative means to produce cleaner energy from  coal. – New Ziana

Zimbabwe is widely regarded as the richest nation on earth in terms of untapped mineral resources per capita.

The country is blessed with the world’s largest diamond reserves, second largest platinum reserves after South Africa and over 40 exploitable minerals.  Gold is literally everywhere in the country.  

Chrome abounds along the Great Dyke, a unique geological formation that runs almost through the middle of the country from the south to the north.  Coal-bed methane gas is found in the Lupane-Hwange sector of Matabeleland North as well as in Gokwe in the Midlands.  Natural gas deposits occur in Chiredzi as well as along the Zambezi Valley. 

With the world’s automotive industry moving away from heavily polluting liquid fuels – petrol and diesel – to cleaner, renewable energy sources anchored by lithium batteries to propel engines, Zimbabwe is seen playing an increasingly central role in the mining of that mineral whose deposits are found in Bikita in Masvingo, Kamativi in Matabeleland North and Mashonaland East.  

It is estimated that Zimbabwe is the fifth largest producer of lithium globally after Australia, Chile, Argentina and China.  The position is largely based on output from one mine, Bikita Minerals which suggests that if projects in Mashonaland East and Matabeleland North are fully developed as will come to pass in the next few months, the ranking will shoot up.

Other minerals found in the country are iron, asbestos, nickel, coal, and silver as well as rare earth elements.

Large mining companies are active here, among them Zimplats and Mimosa who are mining platinum, Metallon Corporation Group which runs a number of gold mines, Prospect Resources which is developing the Arcadia Lithium Project near Harare, Invictus Energy which is in the initial states of exploring for natural gas in Muzarabani and Karo Resources who are finalising the resource exploration and quantification programme at its mining site for the ,2 billion platinum investment in Mhondoro-Ngezi Mashonaland West Province.   

We expect to see the signing very soon of a joint venture agreement between Katanga, a partnership between the Chiadzwa Community and London Stock Exchange listed exploration and mining company, Vast Resources and the Zimbabwe Consolidated Diamond Company.

Alrosa, the Russian giant which is the world’s biggest diamond producer, is one of the few companies picked by the Government to begin diamond mining in Manicaland.  London Stock Exchange-listed Vast Resources and China’s Anjin are the others.

 Although the country has a lengthy mining record from the rudimentary workings dating back to the Seventh Century, according to the Zimbabwe Geological Survey, the mining industry has definitely not punched to its weight; rather it punches well below its weight given its world-class potential.   

Why this has been the case is that there has not been strict focus on that industry.  The impact of this has manifested itself in limited investment in exploration of the resources that have the potential to turn Zimbabwe into the jewel of Africa.  Exploration is the basis for any modern investment in mining thus when and where there is poor investment in the upstream side of the value chain; we cannot expect an extractive industry to emerge.  

On Monday, President Mnangagwa launched what is in our view the most comprehensive blueprint specifically for the mining industry, a plan that should result in the building of a US$12 billion sector by 2023.  Gold is expected to contribute US$4 billion, platinum US$3 billion while chrome, iron, steel, diamonds and coal will contribute US$1 billion each.  Lithium is seen contributing US$500 million while other minerals will contribute US$1,5 billion.

“The objective of this strategic roadmap is to facilitate the exploitation processes of the country’s minerals throughout their entire value chain that is from exploration, mining metallurgical processing, value addition and beneficiation,” said the President.

“My Government is desirous to transform the mining industry and ensure that the country achieves social equity and equality around communities where mining takes place. In this regard, the sector should enhance and adopt best practices, including occupational safety, health and environmental management in order to ensure appropriate healthy conditions of employees, local communities and the general public.”

We have seen much investor interest in the economy in recent months, particularly in the mining sub-sector and hope that after the Monday launch the interest would grow bigger.

As the President said, we want more investment, not only in extraction of the bountiful minerals that lie underground but also in value addition and beneficiation.  We want to see a whole diamond sorting, polishing, cutting and jewellery manufacturing industry developing in the country.  The nation will benefit more if one takes into consideration that a carat of diamond grows seven times in value from extraction to the stage where it is set on that adorable ring, wrist watch or bracelet.

Furthermore, we must make lithium batteries here so that Panasonic and Telsa, the world’s biggest battery and electric vehicle makers, buy them from here.  Yes, platinum miners launched a refinery some five months ago, which is commendable progress on the path to greater local value addition and beneficiation of locally extracted mineral resources.  However, much more potential exists for more domestic platinum products manufacturing.  

If all steps as enunciated by the President are taken, the US$12 billion mining industry that we all desire will be possible in the next four years_The Chronicle